Reinventing HR at Macy’s

We recently had the opportunity to meet with Chris Coy, Vice President of HR Reporting and Data Management at Macy’s to discuss a two-year project they are in called HR Reinvent. Macy’s is reorganizing and reinventing HR, and Chris was willing to share more about their project with me.

Key Takeaways

About Macy’s

Generally, most people have heard of Macy’s, but they are a 158-year-old company. They were founded by RH Macy in 1858 in New York City. It was originally started as a dry-goods store and now they are a conglomeration of several regional mom and pop department stores that got bought up by various department store companies that merged and acquired each other into Macys. Their sales are currently more than 27 Billion and operate 870 stores, in 45 states that includes D.C., Guam, and Puerto Rico. Their main brand is Macy’s but they also include Bloomingdales, Bloomingdales outlet stores, Macy’s backstage . Their online retail process is under Macys.com, Bloomingdales.com, and bluemercury.com. They trade on the New York Stock Exchange under the symbol of M as in Macys.

Can you tell me more about you and your role at Macy’s?

I’ve been with Macy’s for 22 years. I started in an executive training program with Federated Department Stores and shortly after I started we acquired Macy’s. I have been in both functional and technical roles within HR and Benefits for much of my career. When this project started last spring of 2015, I was asked to come over to the reinvent team. I went on the technology team and right now I am the Director of HR Reinvent leading our Benefits initiatives. I am responsible for managing the technology shift from PeopleSoft and converting that benefits data into our HCM environment. That includes the eligibility set up, the rate set up—all that stuff within PeopleSoft. So basically, transferring our entire administrative set up from PeopleSoft into Oracle HCM Cloud.

You have a lot of history there. Can you talk a little bit in general about the technology footprint within Macy’s?

We are primarily an Oracle client. At the core we have been on PeopleSoft for about 20 years. We were one of the first companies to implement PeopleSoft. We use PeopleSoft Core HR, core admits, we also administer our own payroll and we use PeopleSoft products for that. We built a lot of custom applications within PeopleSoft, including a payed time off application that we call “Macy’s time off.” We use a modified position management within PeopleSoft. We also have a job requisition system that we built in PeopleSoft as well too, which is critical for us given our size. We have several different payroll functionalities we built including online adjustments for our business partners out there. In the benefits world, for instance, if they must adjust an employee’s deductions or onetime adjustments they can enter that and the payroll team can just approve it. All that is built within PeopleSoft. We use Chronos for time-keeping and we use OBIEE, Oracle Business Intelligence Enterprise Edition for analytics. We also use Taleo for recruiting and performance management.

The future state is that we basically replace all the core benefits administration and payroll with Oracle HCM Cloud. We are building extensions to the applications Core HCM doesn’t include, like our requisition and management application. We are doing this so those applications can pre-integrate with the Oracle HCM. Of course, we are rebuilding all those interfaces and integrations with things like Chronos, our stock vender and our e-comp system.

Can you tell me more about HR Reinvent?

Essentially what we are going through is a three-pronged approach to HR. We had some consolidated HR groups, a consolidated benefits team and payroll team, and a few HR functions that were done in a centralized environment operating on PeopleSoft. But we still had a lot of stuff that was being done in our store locations by our HR business partners—HR managers and HR administrators out in the actual stores. What we are trying to do is build out that shared services environment. We are going to call it Macy’s Employee Services. It will be a bigger group so anything that is administratively related to HR will be pulled out of the stores and moved here to Cincinnati. We are creating a new and bigger space for all those functions. That is the first part, the Employee Services space.

The second piece is called Centers of Expertise, or COE Group. This is your typical head of benefits, head of compensation, head of HR that are more corporate roles. We have had those and have those today but what we find is that those groups have a lot of administrative teams underneath them as well too. So, we are taking anything that is administrative and moving them to Employee Services. That allows those centers of expertise to focus on being strategic. Looking at benefits, for example, we are keeping up with the latest trends in health and welfare, wellness, wellbeing, etc. and are trying to drive strategy for the administration portion of benefits.

The third part is back to those HR business partners’ stores that do a lot of paperwork. We are HR people, we love our paperwork. We are trying to have them do less of the paperwork and more of the strategic work of business partners driving business. In our case, by being a better partner on talent, they can sell more shirts, more clothes in our stores, etc.

At the center of the transition to that kind of model is the move to Oracle HCM Cloud and utilizing the tools and the functionality that comes with it to help build these out.

It’s great you are looking at the bigger picture and not just a change in technology. How do your best end-users feel about all this?

The end-user knows that modern technology is coming but I think that a lot of our focus is on that organizational change piece. What’s happening? How does my role change? How is this going to look moving forward? That is the bulk of what end-users are focusing on now.

What are some of the drivers for your HCM integration?

We have a new Chief HR Officer who came in several years ago from a couple of large companies. What he found was that Macy’s was investing heavily on administration on the HR side and not investing a lot in HR systems. What we found was to get new functionality and to take new technology even within PeopleSoft it was very expensive and very labor intensive for us to upgrade. Much of that was because of all the customizations that we built within the PeopleSoft enterprise that we have today. That’s really the biggest driver—to minimize expenses long term by being able to get new functionality, to stay current and to get an interface that would be refreshed and new functionality to influence the product in six months.

Technology is changing so frequently it’s important to keep up with the newest and greatest things. With that many employees, you must do it in the easiest way possible. I know it’s a two-year project and you have not fully implemented it yet, but have there been any difficulties? Is there anything that you would do differently or change?

It’s difficult to say when you are looking at your current process. If you are a company like we are at Macy’s, we are very set in our processes and using the technology as it is today. I would say that the biggest challenge that we have had is to get folks to step outside the box, look at things differently and ask questions. The process we are going through at Macy’s is extremely unique due to our size. We partnered with a lot of other bigger companies that are in the process of going to HCM and we talk to them about it.

An example of how this helped can be seen within our benefits data. When we initially looked at the requirements to setup HCM to represent what we currently did today, we had a little over 40,000 rows of data. We stepped outside the box and got aggressive. We started asking why? Why do we have to do it this way? Why is the structure this way? Why can’t we look at a different way of doing the rates and leveraging some of the functionality that is in HCM Cloud. When we did that, we got the rows from 40,000 to just under 1,000 so it was a huge win for us when you account for setup and maintenance.

I also think that there is a tendency to embrace the technology as Oracle is delivering it and say “I know this isn’t necessarily aligned with how we are doing it today. Let’s ask the question, can we do it this way? Can we change our process?” I think that’s been the biggest hurdle, going from an application that you can customize to something that you pretty much must keep and you can configure it to operate a little differently but only to a certain extent.

That’s incredible that you could streamline your data so much. It sounds like if you are going to make the leap, you must take some risk, but the benefits will be realized once it is done.

Another thing is, to be honest, we are one of the early adopters on HCM Cloud and we are probably the biggest of their initial clients. Transitioning to HCM Cloud, there are a lot of things that we went through that were critical for our go-live. Functionality-wise some stuff didn’t exist because it was and is still a new product. But the one thing I will say about Oracle is that they are committed and they are working very hard to develop that functionality for us. For instance, HCM Cloud didn’t have a billing module. They are developing that for us before we go live. A key lesson for us is to make sure you go through all your requirements and if it is really something that doesn’t exist within HCM Cloud, then open a request with Oracle and work with them to try and get that feature in the product. They will certainly make an attempt to help, especially if your request is something that can be broadly used by other customers too.

That’s great that you can help influence some of the stuff that is being developed. I see that as a strong selling point for the move to the cloud. Were there any resources that helped you make the transition? Are there any documents that you wish you had during the process?

We leveraged a lot of conversations with other customers. We knew of a company that was using Deloitte as their implementation partner just as we were and are. We had a meeting with their teams in the fall of 2016 and we discussed a lot of our challenges and shared how we were doing things. The more HCM Cloud customers we can talk to, the more powerful our network is going to be. If anything, I wished there were more customers out there to collaborate with. That’s really where Quest comes in. There weren’t really a lot of other resources to go to and learn from their experience.

When it comes to resource documentation I would say that there is not a lot out there right now on best practices as it’s still kind of a new area. I think that in the cloud space there’s more about Workday than Oracle HCM right now. I think that’s going to change. Again, Oracle is rapidly developing their product to compete with Workday and I think you are going to see more and more customers jump to HCM Cloud because Oracle can scale a little bit better for bigger clients. We did reference a lot of Oracle’s reference materials through their customer connection website. A lot of our learning is trying to leverage as much knowledge from Deloitte and conversations with other customers as possible.

It’s great to hear how you could learn from and share experience with other companies. Can you talk to me about how your functional and your technical teams are working together on this project?

On the functional side, we organized a team into a couple different types of segments. There’s a PMO office that is managing the project at a global level. Then we have an organizational change lead that is more on the functional side. We also have a process design person. As we have gone through all the different meetings and gathering of requirements, we have had a change person who is in each of the benefits meetings alongside a process design person. That way if there are questions about the process itself and how it works with the technology they are there to discuss it with us.

I myself am the lead for technology benefits, but I also work directly with our functional benefits team. This includes the Employee Services group and the higher-level Centers of Expertise group. The data streamlining we did where we reduced the number of rows from 40,000 to 1,000 was done in conjunction with those functional teams, so it’s absolutely been a collaborative effort between the two. You can’t do this in a vacuum. That’s 100% apparent to us.

A lot of companies think that you can operate in a vacuum and that’s what is hurting them in their process.

I will say that one of the biggest advantages that we have is that we have people on this as a full-time job. A lot of the other companies that Deloitte has worked with that have transitioned to HCM Cloud or tried to do this have made this a part of their day-to-day work. It’s extremely difficult. This project requires 100% focus. I cannot imagine trying to do this with some of the other roles I did.

It’s also advantageous to include people who understand technology but who have also been in that functional space. I worked on the benefits team for many years so I know how they work and I know how the technology works it’s important to understand both.

That makes perfect sense. You don’t want an outsider coming in and saying, “This is what you are going to do.” The transition would be harder for people if they were being directed by someone who didn’t understand them. Is there anything else you would like to tell other customers about the integration and upgrades and what your company is going through?

It’s a ton of work, it’s fun. I think it is about making sure that you are leveraging the right people internally, pulling them out of their day job, and putting them on this project full-time. It was one of the biggest advantages and smartest things that we have done on this project. The other thing I would say is for us there hasn’t been a good way to phase any of this in. Most people say, “Why are you doing this big bang? Why are you changing everything at the same time?” Unless you are operating your HR in multiple countries—which we are not right now—there really isn’t an easy way to phase this because everything is so interconnected. We considered doing that, but at the end of the day it would be more work to phase it in than to just do it all at the same time. There is nothing else I would rather be working on than this for Macy’s. It’s interesting and dynamic work and I think it is going to be one great story by the time we get through it.